So why are many traditional retailers flailing given favorable economic trends?

According to Michael Kors CEO John Idol, it comes down to one thing: online sales.

"Unfortunately today, e-commerce generates a lower operating profit for us than four-wall brick-and-mortar," he said Tuesday during his company's quarterly earnings call.

Idol added: "We think over time that will reverse itself, but, as you know, when the consumer requires free delivery, free return, wonderful packaging, plus there's a new trend that people are buying multiple sizes of things to try them out at home and then return them, that all is a negative headwind for us."

It's pretty simple: There is a systemic shift from in-store buying to online shopping. For retailers, online shopping is a money-losing hassle, but customers love it. And customer expectations — consider the "order four sizes, try them on, and send three back" plan Idol lays out — are only getting higher.

Michael Kors' operating margins, for example, decreased 2.5% from the company's third quarter last year. Idol, and other CEOs, have said this shift is necessary to preserve their business, but there are obviously growing pains — and, for investors, lower profits.

Overall, however, investors cheered Michael Kors' quarter as the company beat expectations. The stock jumped 24% on Tuesday.